"Uncertainties over the price development continue. Poland and Italy have big emissions and we could see sharp movements on the market when their plans will be accepted," Jussi Nykanen, head of environmental trading at GreenStream Network, told Reuters in an interview.

"There is a small shortage of supply in the market. These countries will have a key role for the demand-supply development," Nykanen said.

The emissions' trading scheme is a linchpin in the EU's plan to fight climate change and meet its obligations under the Kyoto agreement that aims to reduce heat-trapping greenhouse gases.

It involves some 12,000 plants including power stations, steel and paper mills and other energy-intensive industries.

Companies that exceed their carbon dioxide caps can buy emission rights -- each right allowing them to emit one tonne of greenhouse gas -- from firms which end up below their targets.

GreenStream Network, a top emissions broker in northern Europe, is majority privately-owned, with 26 percent belonging to German state bank HSH Nordbank AG [HSH.UL] and its investment bank arm HSH Gudme Corporate Finance.

SMALL CAKE BUT GROWING FAST

Power exchanges from Germany, Britain, Norway and Austria are gearing up to enter the emissions market early next year, and a couple of others are also thinking about joining.

"I wonder if there is enough trade for so many exchanges ... It will be a big question how liquid these bourses will be. At some stage we will see some dropping out," Nykanen said.

"In the beginning of 2005 I expect monthly volumes to be at similar levels to current, a couple of million rights per month," he said. In October and November the total market volume has been at some 2.4 million rights.

On Friday emission rights traded at around 8.5 euros.

Barclays Capital has estimated the emissions market could be worth up to 40 billion euros ($53.55 billion) a year, if it's growth matches that of the region's power markets.